Early in your company’s life, your greatest strength may be your ability to juggle multiple goals, priorities, and initiatives — to be an expert not just in your field but in your business.
Juggling was where Frederic Jondreau, the founder of American Sign Language, was at his best (If you’ve ever seen a sign language interpreter standing near a speaker, that interpreter was probably hired through a company like American Sign Language). Like many owners, Frederic managed dozens of customers and hundreds of contractors brilliantly.
Frederic was the master of his own universe, right up until he unexpectedly passed away in 2004.
That’s when his son, David, and daughter, Jennifer, took over his business. Forced to learn on the job, David followed his father’s example and kept everything in his head.
“That was how my dad ran things,” David said when we interviewed him on Built to Sell Radio, “He kept everything in his head. So I put it in my head.”
Following his dad’s management style was not working for David. For example, individual client and interpreter preferences were not documented. If a coordinator shifted roles — or simply forgot — then client-interpreter relationships suffered.
The Power of Getting It out of Your Head
David decided to start writing down standard operating procedures for his employees to follow. He created systems to streamline functions and automate processes.
Over time, David codified and automated just about everything in his business. Policies were written up, and his procedures for billing and accounting were documented. The business began to run on a database and a system — not in people’s heads.
Despite his success at getting American Sign Language to run more smoothly, David was restless. He had inherited the business with his sister, but it was never his passion or goal to run a sign language company.
David decided to sell.
He quickly received an offer of three and a half times pre-tax profit from New Language Capital. David agreed in principle, but before the deal could be finalized, something unexpected happened. American Sign Language won a multi-year contract with the potential to double its revenue overnight.
In the old days, David would never have considered taking on such a big project, but now that his business was systematized, he felt confident they could handle it. David took the job and went back to the acquirer who, thanks to the juicy new contract, agreed to double their acquisition offer.
How to Remove Yourself as the Hub
How well your business would run without you is something we call your Hub & Spoke Score over at The Value Builder System™. We measure your business on all eight factors acquirers look for in a company, and your Hub & Spoke Score is one of the biggies.
To gauge your score on Hub & Spoke, ask yourself a few questions:
- Am I the only person who can make certain decisions? The more decisions that depend on you, the greater your business relies on your availability and presence. Often the important decision you can make is not what you should do but who will make the decision at hand.
- How many processes require my sign-off or approval? As you grow, implementing systems that provide checks and balances can ensure day-to-day operations will run smoothly without you.
- How often do you answer the same questions? Create guidelines or thresholds. Maybe you’ll grant salespeople the authority to offer a certain discount level. Or allow customer service reps the authority to expedite shipping, up to a certain cost. The more authority you confer, the more responsible and engaged your employees will feel.
Get your company to run smoothly without you and you’ll offer more consistent customer service and be able to grow your business without you as a bottleneck. And one day, when you decide the time is right, you’ll be able to sell for a healthy premium because someone else can run your company without you calling all of the shots.